Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers /
Union Leaders, following a period of strike / Go slow / Murders (1979 -
1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open /
honest communication led to a remarkable atmosphere of trust between
Workers and Management, which, in turn, increased productivity at 3% per year
(ave).
|
6 Dec 1985
To:
Dear Friends
What is
common between
b) Central Govt. Staff Strength
c) Tamil Nadu Electricity
Board Agreement with Union ?
Apparently nothing
- except that
the following reports appeared in a newspaper on the same day !
What difficulties are
being faced by
refrigerator manufacturers ? To name a few:
u Rising Material/Component Costs
u Rising Labour Costs
u Heavy Taxes (excise etc.)
u Fierce competition (entry of voltas)
u Slack demand.
The
report says Kelvinator
is carrying a stock of ONE LAKH refrigerators valued at Rs.30 crores!
This is despite reports that Kelvinator has not raised its selling prices during
last 5 years - and this is despite the
fact that Kelvinator employees
raised their productivity by 75% in the same 5
years (from 8 refrigerators per employee per month to 14 refrigerators per employee
per month) (See my Circular of
.7.2.85).
Amongst the ''products that we make at Powai, do we have any which will
end-up like refrigerators with profit margin of only 0.8 to 0.5 percent ?
In my February
circular,
I had also mentioned
about the productivity of Maruti -
employees.
Last month,
while in Delhi, I got the
latest figures about Maruti from one of their senior executives.
|
|
Country/Company/World
|
Average Cars assembled per employee in one year
|
1
|
Premier Automobile/
Hindustan Motors
|
1.9
|
2
|
World Average
|
19
|
3
|
|
25
|
4
|
|
40
|
The news-report on "Central Govt. Staff Strength" speaks of
u Winding up departments/sections
u Reducing Staff Weeding-out
inefficient, unwanted corrupt employees
u Recruitment freeze of last 3 years
u Surrendering unfilled posts
u Handing over loss-making
units to private sector
But if a private-sector unit starts making
loss, who shall it hand-over itself to ?
No chancel !
The Government is
not likely to
make that mistake again!
And as far as other private-sector companies are concerned, there are a few willing to take over a "Sick" unit. And if ever someone is ready, his first
condition is,
"Get
rid of all your existing employees before I
take over".
And in case
you have not heard. National
Rayon had a 18 month strike/lockout in 1984-85. They
reopened in May 1985, but are back
in trouble once again. And this time it looks like "terminal" illness'. Their chief
executive Mr. R.P. Kedia is reported to
have said (Fin Exp. Oct.17) that
u it took National Rayon 30
years to build
up a reserve of Rs.27 crores.
u it has taken 3 years of employee agitation to reduce it to ZERO;
And further
east in Durgapur,
The Alloy Steel Plant (ASP) of Central Govt. has accumulated a loss of over Rs.ll7 crores! With
manpower numbering 7400
and earning an average
of Rs.35,000 per year (highest
amongst SAIL plants), direct manpower-cost alone comes
to Rs.26 crores/year! And from
October 3, they have "stopped working"'.
(This assumes that they were "working" earlier!!)
Mr. Nayak, a Senior
Executive of that Company has appealed to the employees in the
following words.
"In
view of
disturbing financial position
of the Company, such a plant would have to be closed down but, this was not done because it is still hoped that the plant would
recover by the determined and united
efforts of all of us ...
Any industry has to make internal
efforts to counteract adverse external
conditions in order to survive ...
Total manpower should not be further increased.
This is a necessity for the survival of ASP ...
It is well-known that overmanning
led to reduction of efficiency
of individuals as well as groups of people".
Turning to
the agreement signed between
Tamil Nadu
Electricity Board (TNEB) and the
unions, we find that the staff strength will be reduced as
follows:
u Field staff
... 19300
But will
someone explain the meaning of,
"The
Post of Helper ... has been abolished
but 18250 helpers now in employment will
not lose their jobs as
26700 posts are lying vacant because of
no recruitment to this cadre since 1974."
I have
asked for details, but I suppose they
know what they are talking!
Whichever
way you look, the message is clear. it is no
more
"Produce or Perish"
It is,
"Produce productively or perish"
In the
context of Powai Works, this reads, "Produce
more with less people or perish"
And we do not have
to go very far to understand why I am making such a statement.
In the
seventeen months, (since
we signed our
4-year agreement), the D.A. has gone up as
follows:
|
|
Increase
|
|
April 84
|
Sept. 85
|
|
|
|
906
|
1021
|
115
|
Max. D.A.
|
2160
|
2436
|
276
|
After we
allow for,
u Service increment of April 1984
u Normal increment of
April 1984
u Normal increment of April 1985,
wages, at
Powai, have gone-up as follows:
AT MIDPOINT OF THE GRADE
Month
|
Clerk I
|
|
TA I
|
|
SB
|
SSA
|
|
|
3366
|
3253
|
3251
|
3208
|
2530
|
2246
|
|
|
3728
|
3643
|
3635
|
3585
|
2987
|
2629
|
|
per month)
|
362
|
390
|
384
|
377
|
457
|
383
|
Wages include Basic, DA, HRA, LTA, SPL Allowance,
Medical Allowance and Conveyance Allowance.
And
what is expected to happen to our
manpower strength at Powai ?
Let us see
|
Retirements
in Calendar year 1986
|
Net
Additions planned during budget-year 85-86
|
|
|
14
|
36
|
|
|
14
|
21
|
|
|
14
|
21
|
Total
|
42
|
78
|
(* excludes all types of Trainees)
|
What I do
not know for sure is,
"While calculating net additions
whether replacements for persons
retiring are included or excluded".
And I
suppose, it would be a safe guess that
"Department-heads
will certainly ask for
replacements of employee
separations due to death/resignation/termination".
What will
this do to us? This rising manpower and galloping wages ? If there
is very little we can do to
stop wages from rising, let us at least bring-down
manpower!
And let us do this
before some of our products sink below the minimum profitability-line,
taking some of us with them!
It is time
to stop saying "this is not my job".
Tomorrow
there may be no job!
H.C. PAREKH
